XL’s New Standalone Terrorism Policy Addresses TRIPRA Gaps

December 3, 2014

XL Group’s U.S. Crisis Management business has introduced a new standalone terrorism insurance policy intended to help U.S. businesses address potential gaps in coverage provided by the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA).

With TRIPRA reauthorization still in question or uncertainty around what the scope of protection in the future might look like if it’s extended, many businesses do not want to leave their terrorism insurance protection in question; instead, they’re seeking TRIPRA alternatives that not only address potential coverage gaps but also extend protection in more situations, without a government certification requirement, the company said in a statement.

Under the current TRIPRA legislation, an act must be certified by the U.S. Treasury Secretary, Secretary of State or Attorney General as an act of terrorism for businesses to collect federal terrorism coverage. Also, losses less than $5 million are not protected under the federal program. As of April 2014, for instance, Boston Marathon bombing claims for property and business interruption, which amounted to approximately $1.9 million according to a Massachusetts state report, are not near TRIPRA’s established threshold.

While the event’s losses might not have been enough to certify the Boston Marathon bombings as an act of terrorism, they certainly were enough to raise concerns among many businesses, the company stated, adding that even a $100,000 uninsured loss can be too much for many businesses to sustain without the right insurance protection. Because businesses have a higher degree of coverage certainty, XL Group created “a market-leading policy that more broadly and comprehensively addresses acts of terrorism and sabotage,” the company stated.

With policy limits of up to $100 million available, XL Group’s new Terrorism insurance policy:

  • Includes a broad definition of terrorism including coverage for political, religious and ideological purposes
  • Extends to cover an act of sabotage
  • Provides insurance coverage often limited or excluded by other terrorism markets for business interruption, extra expense, loss of rental income, service interruption and radiological contamination
  • Is recognized by lenders as an alternative to TRIPRA

XL Group’s standalone terrorism coverage is provided by XL Group plc’s insurance subsidiaries XL Specialty Insurance Co. and Indian Harbor Insurance Co.

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